MUMBAI: The government may be looking to roll back or tweak a budget announcement, imposing long-term capital gains (LTCG) tax on holders of ESOPs and private equity investors, people close to the development said.In the budget, the government had introduced a provision whereby anyone who acquired shares in unlisted companies before October 1, 2004, and had not paid securities transaction tax (STT) will be liable to pay 10 per cent LTCG tax. "Several representations were made by the industry to the government explaining the unintended consequences of longterm capital gains tax in unlisted shares," said Paresh Shah, lead partner-tax & regulatory, KNAV, an international tax advisory firm. ET had on January 19 written that the government was looking to introduce LTCG tax on group-Z category of shares. There are about 2,200 companies under the category on the BSE.Some private equity and venture funds have requesed the government to exempt them from the 10 per cent tax on their long-term returns. For example, a tax framework set to be applicable from April 1 will cover loopholes exploited by several businessmen for manipulation.

Source: Economic Times February 21, 2017 19:18 UTC